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Tata Steel’s Q4 loss at Rs 3,214 cr

Tata Steel has reported a consolidated loss of Rs 3,214 crore in the March 2016 quarter against a loss of Rs 5,674 crore in the year-ago period, owing to lower net sales and exceptional items impairment charges taken on restructuring of Europe operations and employee separation compensation in India.

The company, India’s largest steel producer, however, did not make any announcement on the sale of its UK assets.

Its consolidated net sales for the March 2016 quarter declined 12.5 percent on a year-on-year (y-o-y) basis to Rs 29,164 crore in the March quarter as deliveries slipped owing to the closure of some units at Tata Steel UK operations.

According to Bloomberg estimates, the company’s bottom line was expected to report a loss of Rs 979 crore, while the top line was expected to be at Rs 30,337 crore.

The firm’s revenue and net profit numbers were lower than Bloomberg estimates, but its earnings before interest, taxes, depreciation and amortisation (Ebitda) at Rs 2,270 crore was higher than the estimated Rs 1,367 crore. Its Ebitda in the March 2015 quarter was Rs 1,580 crore.

“While the pressure on product prices continued during the quarter both in India and Europe, our operations were more resilient across most geographies,” said Koushik Chatterjee, group executive director (finance and corporate), at Tata Steel.

The total impairment charge taken by the company in the quarter under review stood at Rs 2,858 crore. In the March 2015 quarter, it had taken an impairment charge of Rs 4,476 crore.

For 2015-16, Tata Steel’s loss increased to Rs 1,674 crore from Rs 1,388 crore in the previous year. Deliveries of the commodity stood at 6.94 million tonnes (mt), down 1.7 per cent from 7.06 mt a year ago.

The company’s Ebitda per tonne in the period under review stood at Rs 3,200 against Rs 2,700 in the corresponding period a year ago.

As on March 31, the company’s consolidated net debt stood at Rs 74,000 crore.

“There is no significant repayment for both domestic and Europe operations and, hence, we do not see need for further refinancing as of now,” said Chatterjee.

The company plans to spend under Rs 10,000 crore in capital expenditure for the current financial year, most of which would be towards sustenance capital of India, southeast Asia as well as European operations. In the year ended March 2016, the company’s capex stood at Rs 11,486 crore with about Rs 3,600 crore spent on the Kalinganagar unit. Tata Steel said it would grow its domestic volumes by five or six per cent in FY17.

On the status of its UK asset sale, Chatterjee said the process is on as some bidders have sought clarification. “No bidder has been short-listed yet and evaluations are on,” he added.